About this case:

• Citation:
  [2023] IECA 291
• Judgment:
  External link
• Court:
  Court of Appeal
• Judge:
  Mr Justice Senan Allen

Delivering judgment for the Court of Appeal, Mr Justice Senan Allen found: “Having put the appellant’s case as best he could, in the end, counsel accepted that he could not identify any analytical error in the judgment of the High Court. There was no substance to the appeal…”

Background

In April 2023, the plaintiffs commenced proceedings against the defendant insurance companies seeking various reliefs, including declarations of their entitlement to an indemnity on foot of two insurance policies in respect of the loss of two Boeing 737-800 aircraft which were leased to a Russian company, and which were seized by the Russian Federation following its invasion of Ukraine.

The plaintiffs made an ex parte application for liberty to issue and serve the proceedings upon the appellant, a Russian insurance company, outside of the jurisdiction pursuant to Order 11, rules 1(e)(iii), (f) and (h) of the Rules of the Superior Courts, and for substituted service by email pursuant to Order 10, rule 1.

The plaintiffs maintained that the High Court had jurisdiction to hear and determine its claims against the appellant under Article 25(1) of Regulation EU No.1215/2012, known as “Brussels I Recast” but had made an application under Order 11 from an abundance of caution.

Evidence justifying service upon the appellant was tendered on behalf of the plaintiffs, including documents named “Evidence of Cover” which contained a choice of law and jurisdiction clause to the effect that the parties agreed to submit to the insured’s country of domicile.

Having demonstrated that the plaintiffs had a good cause of action as against the appellant, and that convenience and comparative cost required that the proceedings be heard in Ireland, the High Court granted liberty to issue and serve the proceedings upon the appellant.

The appellant issued a motion to set aside the service of the proceedings upon it for want of jurisdiction.

The High Court

The appellant contended that a document named “Operator’s Policy” provided that Russia was the proper jurisdiction for the resolution of any dispute. The plaintiffs argued that the appellant had not substantiated the grounds it relied upon, and that by seeking an order permitting service out of the jurisdiction, the plaintiffs had hoped to avoid an unmeritorious or tactical challenge to jurisdiction.

Mr Justice Denis McDonald noted that the onus was on the plaintiffs to demonstrate jurisdiction. Having examined the relevant documents, Article 25(1) and the principles set out in Gaffney t/a Art of Fitness v. Life Fitness (UK) Limited [2015] IEHC 123 and Colclough v. Association of Chartered Certified Accountants [2018] IEHC 85, the judge found that there was consensus between the parties as to jurisdiction which was evidenced in writing, that there was agreement that Ireland was the place where each insured was domiciled and that the Irish courts would have exclusive jurisdiction.

The court noted that the only “fly in the ointment” was the provision that all terms and conditions in the Evidence of Cover would follow the Operator’s Policy “as far as applicable”. Considering the appellant’s reliance upon clause 13.1 of the Operator’s Policy which stated that all disputes would be decided in Moscow unless otherwise provided by the insurance contract, the court determined that this was an acknowledgement that if there was a provision to the contrary in the insurance contract, clause 13.1 did not apply.

The judge also confirmed that if there was a provision in the Evidence of Cover document, it could not be said that any contrary provision in the Operator’s Policy applied, and so the choice of law and jurisdiction clause in the Evidence of Cover prevailed.

In the event that he was in error, the judge also considered the application under Order 11. Finding that the plaintiffs had a good arguable case that the contract was governed by Irish law, the court determined that the threshold in Order 11, rule 1(e)(iii) had been met.

As to whether the appellant was a “necessary or a proper party to the proceedings” for the purpose of Order 11, rule 1(h), the court found that as the liability claimed was several liability, and as any failure of the plaintiffs to join the appellant could result in their exposure under the Civil Liability Act 1961, rule 1(h) had been satisfied. The court found the plaintiffs’ reliance upon Order 11, rule 1(f) less convincing, but conceded that it could not be said that the plaintiffs had no argument to make in respect of that element of their case.

The court concluded that due to the practical difficulties that would arise if separate proceedings were brought in Russia, such as the risk of conflicting decisions and of fragmentation of the claim, Ireland was the forum conveniens and the plaintiffs were entitled to proceed in Ireland.

The appellant appealed against the entire decision of the High Court.

The Court of Appeal

Mr Justice Allen considered the grounds of appeal, noting that several grounds failed to explain why it was alleged that the High Court fell into error.

Highlighting the appellant’s acknowledgment that the test on appeal was that in Ryanair Ltd. v. Billigfleuge.de GmbH [2015] IESC 11, “whether the appellant could discharge the heavy burden of demonstrating that the High Court judge had fallen into error such that the decision was untenable”, the court noted counsel’s acceptance that the appellant’s written submissions had not addressed the rationale for the High Court’s judgment.

In relation to the appellant’s contention in respect of Article 25(1) and Order 11, rule 1(e)(iii) to the effect that the Operator’s Policy provided for Russian law and jurisdiction, the court observed that in the absence of evidence of Russian law, the High Court judge had “dealt as best he could… with the appellant’s argument that clause 13.1 of the Operator’s Policy applied” and that the appellant “had not attempted to explain the link between the Operator’s Policy and the Evidence of Cover and had not disclaimed the Evidence of Cover or the authority of the broker to have issued that document to the respondents”.

The court noted that all counsel for the appellant “could say as to the judge’s conclusion — not without misgivings — that the respondents had crossed the low bar of demonstrating a sufficiently arguable case to satisfy the requirements of O. 11, r. 1(f) was that the judge had ‘got the calibration wrong’.”

As to Order 11, rule 1(h), the court stressed that the appellant did not address the conclusion of the High Court on whether the appellant was a necessary or proper party, and on the appellant’s own case “it was one of a number of insurers who had assumed a several liability and that… there is clear authority for the judge’s conclusion that the desirability of avoiding the fragmentation of the claim was a material consideration in assessing whether it was a necessary or proper party to the action”.

Conclusion

Concluding that no analytical error in the High Court’s judgment had been identified, the court dismissed the appeal.

Carlyle Aviation Management Ltd & Anor v Lloyd’s Insurance Company SA & Ors [2023] IECA 291